The 2020 elections in Bolivia take place at a crucial moment for the country. After the resignation of Evo Morales and the majority of the members of the Congress of Movement to Socialism (MAS), Jeanine Añez – a former Bolivian senator- became interim president in 2019.
Although the 2020 elections in Bolivia were originally scheduled for May, they were postponed until October due to the COVID-19 pandemic. Currently, the three likely candidates for the country’s presidency are Luis Acre, Carlos Mesa, and Jeanine Añez.
Understanding the impacts of politics on business in Bolivia is crucial for foreign executives looking to expand or incorporate a company in the Andean country. Learn about the business impacts of the 2020 elections in Bolivia.
A Luis Acre Presidency
As the candidate for the MAS-IPSP party, Luis Acre will continue Evo Morales legacy. During Morales presidency, the economy grew on average over 4% annually, literacy rates have risen rapidly under MAS rule, whilst the poverty rates have dropped a further 20%.
Although MAS had begun to face issues, foreign investment has dropped, and natural resource exports that form such a large part of the Bolivian economy have shrunk further, a continuation of Evo Morales trajectory suggests a growing economy suggests continued opportunities for executives looking to do business in Bolivia.
Furthermore, prior to Evo’s resignation, there were efforts to construct a railroad from the Atlantic to the Pacific coasts through an agreement between themselves, Peru and Brazil. This corridor would give Bolivia further trade abilities with neighbouring countries.
Nevertheless, the process of outsourcing to Bolivia is a lengthy and bureaucratic affair and can take up to fifty days to set up a business in the country. This hasn’t changed under the fourteen years of MAS rule. The Bolivian government professes to be open to foreign investment, however, complicated regulations and procedures make it difficult to enter into the Bolivian market. Thankfully, there are experts that can help navigate market entry before and after the 2020 elections in Bolivia.
A Carlos Mesa Presidency
A Mesa presidency is easier to imagine due to his time as president of Bolivia between 2003 and 2005, and thus speculate on the potential impacts for businesses. The primary focus of Mesa’s mandate is to prevent what he sees as a constitutional crisis occurring in Bolivia, due to unchecked and unseparated powers of the presidency.
Mesa has continued to be relatively quiet on his economic mandate, largely in part to how successful the Bolivian economy has been under MAS. However, he has been vocal on securing the nation’s economic future as the hydrocarbons deplete and a greater focus on renewables. Likewise, he agrees on potential privatisation of the oil and gas fields that could provide positive impacts for businesses if he were to be successful in the 2020 elections in Bolivia.
A Jeanine Añez presidency
If Jeanine Añez were to win the presidency in the 2020 elections in Bolivia, then the potential impacts for businesses would be based on continuation of her current policies. Añez has held the position of president since November last year. Her time so far as interim president has been spent mostly on the fallout or the 2019 Bolivian elections. Most controversially, she issued a decree to use the police and military to help pacify the country as protests following the election continued that led to a number of deaths.
As this has been the focus of her tenure so far, we are yet to see fully her economic policy for the country’s future. However, a number of her actions could lead to potential impacts for businesses. Firstly, she has set out to end corruption problems that have afflicted state-run businesses, especially ENTEL -a mobile phone company- and the Bolivian highway administrator that had hundreds of millions of dollars go missing.
A Bolivia freer of corruption would greatly benefit the ease of doing business for those looking to set up in the country.
Opportunities of doing business in Bolivia
In recent years, Bolivia has shown an extraordinary economic recovery through important economic programs put in place. Therefore, the country is now positioned as one of the fastest-growing economies in Latin America and it is expected to continue growing after the elections.
Furthermore, opportunities for foreign executives in Bolivia have increased, as it is showing interest in foreign investments and partnerships in different sectors, including hydrocarbons, mining, natural resources exploitation, transport, and communication.
Furthermore, there is great potential for foreign entrepreneurs doing business in Bolivia, as the country can be considered as an unsaturated market. The main export product of Bolivia is petroleum gas, contributing to 32% of total exports. Zinc ore follows, with a total amount of 17% of the total Bolivian exports. On the other hand, Bolivia’s imports are mainly cars with a percentage of 5.7% of their total imports. These are followed by the import of refined petroleum, which accounts for 4.4%.
Last, but not least, Bolivia’s labour cost is much lower if compared with other regional economies. Currently, the country’s workforce maintains an average salary of BS 2,122 (around US$310). Business owners can take advantage of Bolivia’s labour cost in multiple sectors, principally manufacturing and customer service.
Take advantage of business opportunities in Bolivia with the support of local trusted expert
Regardless of the results of the 2020 elections in Bolivia, the country is one of the fastest-growing economies in Latin America. This market offers opportune growth conditions for investment, and low costs of labour and future establishment of sophisticated logistics facilities increases business opportunities.
However, navigating local market entry regulations can be complex. It is vital to engage a trusted local partner who can guide you through the process and keep your company’s best interests in mind. At Biz Latin Hub, our team of local and expatriate professionals has a wealth of experience in supporting foreign commercial actors expanding into Latin American markets of their choice. Contact us now to receive customized service for your business requirements and ensure your business in Bolivia starts off on the right foot.
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